Insurance Coverage. M.H.F. may insure: Up to 100 percent of a mortgage loan that finances the purchase, or the purchase and rehabilitation, of an eligible property, provided that all of the requirements of these regulations are met; A mortgage loan on a cooperative unit in accordance with COMAR 05.06.01.10. Eligible Borrowers and Eligible Properties. The applicable standards for eligible borrowers of mortgage loans insured by M.H.F. are set forth in COMAR 05.06.06.06. The applicable standards for eligible properties securing mortgage loans insured by M.H.F. are set forth in COMAR 05.06.06.05, except that COMAR 05.06.06.05D does not apply to an insured loan that finances both the purchase and rehabilitation of the property. An eligible property shall be located in a designated revitalization area as defined in Regulation .03B(5) of this chapter. Eligible Uses of the Insured Mortgage Loan. The insured mortgage loan may be used to pay for the following costs and expenses: Purchase price of the property; Closing costs (financing); Closing costs (title); Prepaid expenses; and Rehabilitation costs permitted in §C(2), below. If the mortgage loan is for the rehabilitation as well as the purchase of an eligible property, then the mortgage loan also may be used for the following rehabilitation costs if the conditions set forth in §C(3) of this regulation are fulfilled: The reasonable cost of correcting major structural defects; The reasonable cost of repairing or replacing plumbing, HVAC, or electrical systems; The reasonable cost of correcting any violations of local planning, zoning, or building codes, or other applicable laws; The reasonable cost of inspections performed in accordance with Regulation .05E, below; and Other reasonable rehabilitation costs, including the cost of cosmetic repairs, which are approved by M.H.F. In order for a mortgage loan for rehabilitation as well as purchase costs to be eligible for insurance, a nonprofit housing agency or nonprofit financial or housing counseling agency active in the applicable designated revitalization area shall certify that: The acquisition and rehabilitation of the property will stabilize or improve the neighborhood; Other resources are currently being targeted to the neighborhood; and The acquisition and rehabilitation of the property represents a significant public purpose action. Agreement with Mortgage Lender Required. A loan insured under this chapter shall be made by: A mortgage lender under an agreement with M.H.F described in Regulation .08 of this chapter; or The Department. Equity Capital. A borrower whose mortgage is to be insured by M.H.F. under the Revitalization Program shall meet M.H.F.'s requirement for equity capital in the mortgage loan transaction as set forth in §E(2)—(6) of this regulation. The borrower is required to pay in cash at least 2 percent of the first mortgage loan amount. Equity capital may be applied to one, a combination, or all of the following items: Purchase price of the property; Closing costs (financing); Closing costs (title); or Prepaid expenses. Equity capital may include gifts, except for those from: The realtor for the transaction; The seller of the property; or Any other party having an interest in the contract. Equity capital may not include loans, except for a loan secured by a 401(k) or other retirement account that is subject to a penalty for early withdrawal under the federal tax code. Once the equity capital amount has been satisfied in accordance with §E(2)—(5) of this regulation, the balance of funds necessary for settlement of the loan may include gifts, including seller concessions. Purchase Contract Inspection Contingency. M.H.F. may require that a home inspection be conducted before closing by a home inspector acceptable to the purchaser and lender. The inspection may be required by the purchaser as a contingency to the purchase contract. The purchaser shall obtain the inspection report, although the cost to the purchaser may be reimbursed by the seller. A copy of the inspection shall be supplied to M.H.F. by a lender with the application required in COMAR 05.06.06.09A. Appraisals. There shall be an appraisal of the property securing the loan to be insured by M.H.F. The appraisal shall: Establish an “as is” value for the property; and Be performed by an appraiser acceptable to M.H.F.